Chapter 16 - Illinois License Law - Exercise 7

Gap-fill exercise

Fill in all the gaps, then press "Check" to check your answers. Use the "Hint" button to get a free letter if an answer is giving you trouble. You can also click on the "[?]" button to get a clue. Note that you will lose points if you ask for hints or clues! The box below includes a word list for this exercise. Words may be used more than once.
   24      25,000      altered      bold      cannot      commission      conditions      details      exclusive      expiration      guaranteed      larger      licensee      Licensees      listing      Offer to Purchase      prohibits      seller      stigmatized      type      void      writing      written   

Written Agreements

No can solicit, accept or execute any contract or other document relating to real estate transaction which contains a blank space that is to be filled in after the signing or initialing of the documents. No licensee can make any addition, deletion or alteration of any signed contract without the or telegraphic consent or direction from all the signatories. Licensees cannot process any contract or other document that has been after having been signed, unless each such change has been signed or initialed by the signatories.

A true copy of the original or corrected contract or other document relating to a real estate transaction must be hand delivered or mailed within hours of the time of signing or initialing such original or corrected contract to the person signing or initialing. Any form intended to be a binding real estate contract must state so in a heading in large type. are prohibited from using any form designated "" when it is intended for it to be a binding real estate contract.

Brokerage Agreements

All brokerage agreements, whether with a buyer or a seller, must be in . All buyer brokerage agreements, whether exclusive or non-exclusive, must contain the following:

1) the amount of compensation, time of payment;
2) the duration of the agreement;
3) the name of the broker and buyer;
4) the signatories of the parties; and
5) the duties of the buyer's broker.

All listings, exclusive or non-exclusive must include the following:
1) the list price;
2) the agreed amount of the commission;
3) the duration of the listing agreement;
4) the name of the broker and seller;
5) the identification of the property involved (common address or legal);
6) the signatures of the parties; and
7) the duties of the listing broker.

No brokerage agreement can contain a clause automatically extending the period of the agreement. Any brokerage agreement not containing an automatic expiration date is . Each brokerage agreement for a residential property of 4 units or less, which provides for a protection period subsequent to its termination date, must state that no fee or commission will be due if during the protection period, the seller enters into a written listing with another broker. A protection period or clause is also known as a safety clause, carry-over clause or extender clause.

Each written agreement must state that no amendment or alteration to the terms, with respect to the amount of or with respect to the time of payment of the , is valid or binding unless made in and signed by the parties. No licensee can use a real estate form that changes previously agreed commission payment terms. Listing agreements that provide for the broker obtaining the full commission with the remainder of the earnest money going to the seller if a buyer defaults, must state this provision in letters than those generally used in the rest of the agreement. Each listing must state that it is illegal for either the owner or the broker to refuse to display to or sell to any person because of race, color, religion, national origin, sex, handicap or familial status

The act requires licensees to work through the broker. There are two very narrow provisions allowing a broker to contact a seller whose property is already listed with another broker. The first provision allows a licensee to respond to contact that is initiated by the . The second provision allows a broker to request from the listing broker the of listing and the date of the listing. The request must be made in writing certified mail return receipt requested. If the information is not received in 10 calendar days, after the 14th day the broker may contact the seller directly, but only if the information is not available from other sources.

Stigmatized Properties

A property is a property whose appeal to buyers may be compromised by factors or events relating to the property that do not affect the environment or the physical condition of the property. These factors or events may be real or perceived. Events may include a suicide committed on the property or a previous occupant of the property may have had AID's or HIV. Illinois specifically any cause of action against a licensee for failure to disclose;
1) that an occupant of the property was afflicted with HIV or any other medical condition
2) the property was the site of an act or occurrence that had no affect on the physical condition of the property, its environment or its structures
3) fact situations on a property that is not the subject of the transaction
4) physical conditions located on property that is not the subject of the transaction that do not have a substantial adverse effect on the value of the real estate that is the subject of the transaction
It should be noted that the 1989 amendments to the 1968 Fair Housing Act include people with AID's, HIV, cancer or any other terminal illness as a protected class. Agents are, therefore, prohibited by federal law from disclosing or discussing an occupant's illness.

Guaranteed Sales Plan

A sales plan (GSP) is any real estate sales plan whereby a broker enters into a written contract with a seller by the terms of which the broker agrees to purchase the property if the broker find a buyer for the property. In a GSP, the seller usually is required to have the property appraised and list the property within a certain percentage of the appraised value. The GSP will also require a minimum listing or marketing period. If the property does not sell at the price and within the time period specified, the broker will purchase the property.

A broker offering a GSP shall provide, to whom the plan is being offered, the and of the plan in writing. The broker must also provide evidence of sufficient financial resources to purchase the property and a broker must market the property in the same manner as all their other listings, unless the agreement states otherwise. A broker that fails to perform on a guaranteed sales plan is subject to all the applicable penalties provided in the act, and a civil penalty up to $ payable to the party injured by the default.